Tuesday, August 19, 2008

TOP STORY > >Cabot pays withholding taxes to IRS

By JOAN MCCOYLeader staff writer

Telephone calls from the Internal Revenue Service that have plagued Cabot Parks Director Larry Tarrant since he was hired in April will end this week since the city council has agreed to pay up to $150,000 in federal taxes, interest and penalties.

The council voted unanimously Monday night to pay back taxes of $97,449.60 owed for the last quarter of 2006 and all of 2007 plus interest and penalties as the IRS requires. Exactly how much is not clear.

City Attorney Jim Taylor has been working with Tarrant and the parks commission to resolve the matter. Taylor told the council that the penalties might be waived but the interest will likely have to be paid.

This is the second time the city council has paid expenses for the parks which are run by an independent commission. In December 2006, former Parks Director Carroll Astin told the council that he needed help with a $100,000 shortfall that resulted in great part from the opening a year earlier of the new community center. Astin told the council he underestimated the electric bill, hired too many employees and charged too little for the programs. He also said too many ball tournaments cost parks $25,000.

When Tarrant asked the council for $150,000 to pay the IRS, Alderman Teri Miessner’s question was short and to the point: “What happened?” Miessner asked.

But the answer was not forthcoming. Parks have been under State Police investigation since Sarah Rye, the parks bookkeeper was arrested earlier this year for embezzling $8,063.44.

Tarrant, who was director of parks programs before he replaced Astin, said essentially that he was out of the loop when the money was withheld from employees’ paychecks, but not sent to the IRS.

“What happened before, I couldn’t say,” Tarrant said. But he said he has paid the federal income tax for 2008: $28,812 in the first quarter and $37,819 in the second quarter.

Tarrant said an audit of the books by Cal Aldridge brought some of the problems to light. Alderman Ed Long said he needed assurance that the problems in bookkeeping have been resolved. Both Tarrant and Parks Commissioner Glenn Howe assured him that financial records are watched closely now.

Without using his name, Howe said Astin withheld information about finances from the commission.

“The prior director didn’t tell us all we needed to know and the commission didn’t dig like it should,” he said.

Howe also talked about the high cost of operating the community center. The electric bill alone is about $250,000 a year.

The community center simply cannot support itself, Howe said. It has to be subsidized by other park programs.

But the hope is that it eventually will at least break even.

Tarrant told the council that revenue is up about $40,000 over this time last year, so parks would be able to pay back the money it needed from the city council.

Howe assured the council members that the new commission is taking a more active role in running the parks and that Tarrant is taking a very active role in the finances as evidenced by the fact that revenue is up and expenses are down.

“I think these problems are behind us if we could just get the debt off,” he said.